For a Firm That Presently Has a Current Ratio of 2.0

question 8

Multiple Choice

For a firm that presently has a current ratio of 2.0, the effect on this ratio of paying a current liability is that it:

• A)raises the current ratio.
• B)lowers the current ratio.
• C)doesn't affect the current ratio.
• D)depends on the amount paid.

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Definitions:

Observation

The act of closely monitoring or examining something or someone to gain information or understanding.

Experimentation

The methodical testing of theories or hypotheses by manipulating variables to observe their effects.

Scientific Attitude

A mindset characterized by curiosity, skepticism, and openness to evidence and reasoning, rather than by belief or intuition.

Skepticism

An attitude of doubt or a disposition to incredulity either in general or toward a particular object; questioning the validity of a particular claim, theory, or belief.